The current worth of a sum of money that will be paid in the future discounted by a rate of return is called the present value. The distinction between the present value of cash inflows and outflows over a period of time is known as net present value. the present values of RM 661 and RM 554.19 respectively.
Given
Future Value = RM 10,000
Time = 20 Years
Rate = 15%
i) Rate = 15% per annum
ii) Rate = 15% compounded half yearly
Required to calculate the present value in each case.
i)PV = 10,000 / (1 + 0.15)^20
PV = 10,000 / (1.15)^20
PV = RM 661
ii) PV = 10,000 / (1 + 0.075)^40
PV = RM 554.19
It outlines how much money you'd have to put in now in order to earn a particular sum later on. The distinction between the present value of cash inflows and outflows over a period of time is known as net present value.
Therefore, the present values of RM 661 and RM 554.19 respectively.
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(i) The present value is RM 1,036.61
(ii) The present value is RM 1,804.40
To calculate the present value of a future cash flow, we need to discount it back to the present using an appropriate interest rate. Let's calculate the present value for the given scenarios:
(i) Interest rate: 15% per year
In this case, we'll use the formula for calculating the present value of a future cash flow using a single discount rate:
Present Value = Future Value / (1 + r)^n
Where:
Future Value = RM 10,000 (the amount to be spent in the future)
r = Interest rate per period
n = Number of periods
Here, r = 15% = 0.15 (decimal) and n = 20 years.
Present Value = 10,000 / (1 + 0.15)^20
Let's calculate it step by step:
Step 1: Add 1 to the interest rate: 1 + 0.15 = 1.15
Step 2: Calculate the power of the interest rate: 1.15^20 = 9.64658 (rounded to 5 decimal places)
Step 3: Divide the future value by the power of the interest rate: 10,000 / 9.64658 = 1,036.61 (rounded to 2 decimal places)
So, the present value of RM 10,000 to be spent in 20 years with an interest rate of 15% per year is RM 1,036.61.
(ii) Interest rate: 15% per year compounded semiannually
In this case, the interest is compounded twice a year. The effective interest rate per compounding period would be half of the annual interest rate. So, the interest rate per period would be 15% / 2 = 7.5%.
Using the same formula, let's calculate the present value:
Present Value = Future Value / (1 + r)^n
Here, r = 7.5% = 0.075 (decimal) and n = 20 years.
Present Value = 10,000 / (1 + 0.075)^40
Step 1: Add 1 to the interest rate: 1 + 0.075 = 1.075
Step 2: Calculate the power of the interest rate: 1.075^40 = 5.54188 (rounded to 5 decimal places)
Step 3: Divide the future value by the power of the interest rate: 10,000 / 5.54188 = 1,804.40 (rounded to 2 decimal places)
So, the present value of RM 10,000 to be spent in 20 years with an interest rate of 15% per year compounded semiannually is RM 1,804.40.
Therefore, the answers are:
(i) The present value is RM 1,036.61
(ii) The present value is RM 1,804.40
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What is the present value of a project that will yield end of year cash flows of $50,000 per year in Years 1 through 3,$75,000 per year in Years 4 through 12, no cash flows for years 13 and 14 , and $100,000 in Year 15 . The discount rate is 10 percent.
The present value of the project is approximately $608,074.03. To calculate the present value of the project's cash flows, we need to discount each cash flow back to its present value using the discount rate of 10 percent. Here is the calculation:
Year 1: PV = $50,000 / (1 + 0.10)^1 = $45,454.55
Year 2: PV = $50,000 / (1 + 0.10)^2 = $41,322.31
Year 3: PV = $50,000 / (1 + 0.10)^3 = $37,565.75
Year 4-12: PV = $75,000 / (1 + 0.10)^4 + $75,000 / (1 + 0.10)^5 + ... + $75,000 / (1 + 0.10)^12
Using the formula for the present value of an annuity, we can calculate the present value of the cash flows from Year 4 to Year 12:
PV = $75,000 * [(1 - (1 + 0.10)^-9) / 0.10] = $460,914.16
Year 15: PV = $100,000 / (1 + 0.10)^15 = $23,818.26
Now, we can sum up all the present values:
Present Value = $45,454.55 + $41,322.31 + $37,565.75 + $460,914.16 + $23,818.26 = $608,074.03
Therefore, the present value of the project is approximately $608,074.03.
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Marlee Limited purchased a machine on March 31 for $78000, paying cash. The company also paid $600 for freight, $500 for installation and testing, $900 for employee training, $800 for supplies to be used in production, and $2400 for a one-year insurance policy. The machine has a residual value of $8000 and a useful life of 6 years.
What is this machine's acquisition cost?
The machine's acquisition cost is $80,700, which includes the purchase price of $78,000 along with additional expenses such as freight, installation and testing, employee training, supplies, and insurance.
The acquisition cost of a machine is not limited to its purchase price alone. Other costs incurred in acquiring and preparing the machine for use, such as freight, installation and testing, employee training, supplies, and insurance, must be considered. In this case, the machine's acquisition cost amounts to $80,700, reflecting the comprehensive expenses associated with its procurement and setup.
Acquisition cost = Purchase price + Freight + Installation and testing + Employee training + Supplies + Insurance
Acquisition cost = $78,000 + $600 + $500 + $900 + $800 + $2,400
Acquisition cost = $80,700
Therefore, the machine's acquisition cost is $80,700.
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Management and leadership development programs often rely on ................ to enhance individual learning.
A- modeling
B-conflict
C- interviews
D-fear
Management and leadership development programs often rely on modeling to enhance individual learning. Hence option A is correct.
Management and leadership development programs often rely on modeling to enhance individual learning. Modeling refers to the process of observing and emulating the behavior, actions, and skills of successful leaders or role models.
By observing and imitating effective leadership practices, individuals can learn new techniques, improve their own leadership abilities, and apply them in their work environment. Modeling provides real-life examples and practical guidance, allowing participants to develop their leadership skills through observation and practice.
Overall, modeling serves as a powerful tool in management and leadership development programs. It allows individuals to learn from the experiences and expertise of others, gain practical insights, and develop the necessary skills and behaviors for effective leadership in their own roles and organizations.
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A demand loan for $5355.76 with interest at 4.2% compounded monthly is repaid after 8 years, 7 months. What is the amount of interest paid? The amount of interest is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
The amount of interest paid on the demand loan is approximately $2742.70.
To calculate the amount of interest paid on a demand loan, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Total amount (loan amount + interest)
P = Principal (loan amount)
r = Annual interest rate (as a decimal)
n = Number of times interest is compounded per year
t = Number of years
In this case:
P = $5355.76
r = 4.2% = 0.042 (as a decimal)
n = 12 (compounded monthly)
t = 8.583 years (8 years + 7 months)
Plugging in these values into the formula:A = $5355.76(1 + 0.042/12)^(12*8.583)A ≈ $8,098.46
The total amount repaid after 8 years and 7 months is approximately $8,098.46.
To calculate the amount of interest paid, we subtract the principal amount:
Interest = Total amount - Principal
Interest = $8,098.46 - $5355.76
Interest ≈ $2742.70
Therefore, the amount of interest paid on the demand loan is approximately $2742.70.
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A firm has a profit margin of 2% and an equity multiplier of 2.9. Its sales are $440 million, and it has total assets of $132 million. What is its ROE? Do not round intermediate calculations. Round your answer to two decimal places.
The Return on Equity (ROE) of the firm can be calculated using the DuPont formula which represents the relationship between the profit margin, asset turnover, and equity multiplier. The ROE of the firm is 1.55
ROE is defined as the ratio of the net income to the average shareholder's equity. In this case, the firm's profit margin is given as 2% and equity multiplier as 2.9. The sales revenue and total assets are also provided as $440 million and $132 million respectively.
Using the DuPont Model, we can find the ROE of the firm as follows:
ROE = Profit Margin × Asset Turnover Ratio × Equity Multiplier
= (Net Income/Sales) × (Sales/Total Assets) × Equity Multiplier
= (0.02) × (440/132) × 2.9
= 1.55 or 155%
Therefore, the Return on Equity of the firm is 155%. This indicates that for every dollar invested by the shareholders, the firm generated a profit of $1.55. Such a high ROE indicates that the firm is generating a high return on its equity investment and is utilizing its assets efficiently to generate profits.
However, a high ROE may also be an indicator of the firm's use of debt financing. In this case, the equity multiplier value of 2.9 may suggest that the firm is using a high level of debt to finance its operations. This poses a risk as high levels of debt may lead to financial instability in times of economic downturns. Therefore, investors should consider other financial ratios such as debt-to-equity ratio and interest coverage ratio before making investment decisions.
So,the ROE of the firm is 1.55.
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Georgia, a single taxpayer, operates a business that produces $100,000 of income before any amounts are paid to her. She has no dependents and no other income. She has itemized deductions of 18,000. Compare the total income tax that would be paid assuming the following additional facts. Ignore payroll taxes and the qualified business income deduction. a. georgia operates the business as an s corporation receiving a salary from the corporation of 70,000. The corporation distributes all if its remaining income to the shareholders. b. She operates the business as a c corporation receiving a salary from the corporation of 70,000. the corporation distributes its after tax income to her as a dividend. c. How would the total tax change of the first two requirements if the corporation made no payments to the owner other than the salary.
a. S Corporation:
Georgia operates the business as an S corporation and receives a salary of $70,000 from the corporation. The remaining income of $30,000 is distributed as a dividend to the shareholders.
b. C Corporation:
Georgia operates the business as a C corporation and receives a salary of $70,000 from the corporation. The after-tax income of the corporation is distributed to her as a dividend.
c. If the corporation made no payments to the owner other than the salary, the total tax would remain the same as scenario a (S Corporation) because the remaining income is distributed as a dividend and subject to dividend tax rates.
To compare the total income tax under different scenarios, we need to consider the individual income tax rates and the taxation rules for S corporations and C corporations. Let's calculate the total income tax for each scenario:
a. S Corporation:
Georgia operates the business as an S corporation and receives a salary of $70,000 from the corporation. The remaining income of $30,000 is distributed as a dividend to the shareholders.
The salary of $70,000 will be subject to ordinary income tax rates. The remaining $30,000 will be treated as a qualified dividend and taxed at the dividend tax rates, which are typically lower than ordinary income tax rates.
The total income tax can be calculated as follows:
Calculate the tax on the salary of $70,000 using the individual income tax rates.
Calculate the tax on the dividend of $30,000 using the qualified dividend tax rates.
b. C Corporation:
Georgia operates the business as a C corporation and receives a salary of $70,000 from the corporation. The after-tax income of the corporation is distributed to her as a dividend.
The salary of $70,000 will be subject to ordinary income tax rates. The after-tax income distributed as a dividend will be subject to dividend tax rates.
The total income tax can be calculated as follows:
Calculate the tax on the salary of $70,000 using the individual income tax rates.
Calculate the tax on the after-tax dividend income using the dividend tax rates.
c. If the corporation made no payments to the owner other than the salary, the total tax would remain the same as scenario a (S Corporation) because the remaining income is distributed as a dividend and subject to dividend tax rates. The salary portion would still be subject to individual income tax rates.
It's important to note that actual tax calculations may involve various factors and deductions specific to the taxpayer's situation. Consulting a tax professional or using tax software is recommended for accurate calculations.
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As an assistant to the executive housekeeper of newly built property, you have been asked to set up a Section Housekeeper Needs Table for the 450-room property for 100 percent, 90 percent, and 75 percent occupancy levels. The workload per section housekeeper is 12 suites per one 8-hour shift.
Specify the number of section housekeepers to be scheduled each day at the three levels of occupancy given the number of section housekeeper hours/day, the number of hours/weeks, and the total number of housekeeper hours in a 30-day period.
Design a table to show the labor needs.
The table that will show the labor needs at 100 percent, 90 percent, and 75 percent occupancy levels for a 450-room property with a workload of 12 suites per one 8-hour shift per section housekeeper is as follows:Occupancy LevelHours/DayHours/WeekTotal Hours (30 days)Number of Section Housekeepers100%288241,92016090%2592119,04013475%21618108,480107The number of section housekeepers required each day at the three levels of occupancy given the number of section housekeeper hours/day, the number of hours/weeks, and the total number of housekeeper hours in a 30-day period are shown in the table above. To obtain the number of section housekeepers, divide the total number of hours by the number of hours worked per day by a section housekeeper and then divide by the number of hours worked per week by a section housekeeper.
Icy Snowmobile, Inc., has an annual demand of 1,800 snowmobiles. Their purchase cost for each snowmobile is $2,400. It costs about $200 to place an order, and the holding rate is 25 percent of the unit cost.
Compute the EOQ. Do not round intermediate calculations. Round your answer to the nearest whole number.
units
Compute the annual holding cost. Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Compute the annual order cost. Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Compute the total annual inventory cost. Do not round intermediate calculations. Round your answer to the nearest dollar.
$
EOQ ≈ 25 units
Annual Holding Cost ≈ $15,000
Annual Order Cost ≈ $14,400
Total Annual Inventory Cost ≈ $29,400
To compute the EOQ (Economic Order Quantity), we can use the following formula:
EOQ = √((2 * Demand * Order Cost) / Holding Cost)
Given:
Demand = 1,800 snowmobiles
Order Cost = $200
Holding Rate = 25% of the unit cost
Purchase Cost per snowmobile = $2,400
Holding Cost per snowmobile = 25% of $2,400 = $600
Substituting the values into the formula:
EOQ = √((2 * 1,800 * $200) / $600)
EOQ = √((360,000) / $600)
EOQ = √(600)
EOQ ≈ 24.49
Since the EOQ represents the optimal order quantity, it should be rounded up to the nearest whole number:
EOQ ≈ 25 units
To compute the annual holding cost, we can use the following formula:
Annual Holding Cost = EOQ * Holding Cost per snowmobile
Annual Holding Cost = 25 * $600
Annual Holding Cost = $15,000
To compute the annual order cost, we can use the following formula:
Annual Order Cost = (Demand / EOQ) * Order Cost
Annual Order Cost = (1,800 / 25) * $200
Annual Order Cost = 72 * $200
Annual Order Cost = $14,400
To compute the total annual inventory cost, we can sum the annual holding cost and the annual order cost:
Total Annual Inventory Cost = Annual Holding Cost + Annual Order Cost
Total Annual Inventory Cost = $15,000 + $14,400
Total Annual Inventory Cost = $29,400
Therefore:
EOQ ≈ 25 units
Annual Holding Cost ≈ $15,000
Annual Order Cost ≈ $14,400
Total Annual Inventory Cost ≈ $29,400
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Project Description: Patti Rochelle, corporate event planner, wants to be able to track group reservations with the conference rooms that are booked for the event. This will involve tracking conference rooms, groups, and events. A group can book several events. Each event is booked by just one group. Each event could require multiple conference rooms. Conference rooms can be booked for several events (on different days.) You will need a junction table for this relationship. Steps to Perform:
To create a database to track group reservations with conference rooms, follow these steps: Identify the entities,Define the relationships,Create tables,Define table schemas.Establish relationships.
Identify the entities: This problem involves three main entities - Conference Rooms, Groups, and Events.
Define the relationships: A group can book several events, while each event is booked by one group. Each event could require multiple conference rooms, and conference rooms can be booked for several events (on different days).
Create tables: Create four tables - ConferenceRooms, Groups, Events, and a junction table named EventConferenceRooms.
Define table schemas: For ConferenceRooms, create columns for RoomID (primary key), RoomName, and Capacity. For Groups, create columns for GroupID (primary key), GroupName, ContactName, and ContactEmail. For Events, create columns for EventID (primary key), EventName, EventDate, GroupID (foreign key), and Notes. Finally, for the junction table, EventConferenceRooms, create columns for EventID (foreign key), RoomID (foreign key), StartTime, and EndTime.
Define primary and foreign keys: Set RoomID as the primary key for the ConferenceRooms table, GroupID as the primary key for the Groups table, and EventID as the primary key for the Events table. Set EventID and RoomID as foreign keys in the EventConferenceRooms table.
Establish relationships: The relationship between Groups and Events is one-to-many, with GroupID as the foreign key in the Events table. The relationship between Events and ConferenceRooms is many-to-many, so EventConferenceRooms acts as a junction table linking the two tables.
Populate data: Add data for all the entities and their respective attributes. Ensure that the foreign keys are properly referenced to their appropriate primary keys.
Run queries: Use SQL queries to retrieve information about the reservations made by groups and the conference rooms booked for various events.
With these steps, you can create a database that effectively tracks group reservations with conference rooms for corporate events.
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__________ is an example of overproduction, excess motion, waiting, excess inventory level, excess movement, defect correction, excess process and lost creativity.
(One word.)
10 points
QUESTION 8
When planning to study a process or system, it is very important to first identify the:
a. Environmental challenges
b. Boundaries
c. History
d. Business plan
____
5 points
QUESTION 9
Which of the following are tools for gathering customer data?
a. Voice of the customer, observation, cause-and-effect diagram, and Pareto charts
b. Voice of the customer, surveys, QFD, interviews, and focus groups
c. Phone surveys, mailed questionnaires, online surveys, and failure modes and effects analysis (FMEA)
d. Secret shopper, random selection X-ray scans, and statistical process control (SPC)
7. Waste is an example of overproduction, excess motion, waiting, excess inventory level, excess movement, defect correction, excess process and lost creativity.
8: When planning to study a process or system, it is very important to first identify the Boundaries
9: b. Voice of the customer, surveys, QFD, interviews, and focus groups
QUESTION 7: Waste refers to activities or processes that do not add value to the final product or service. Examples of waste include overproduction (producing more than necessary), excess motion (unnecessary movement), waiting (idle time), excess inventory level, excess movement, defect correction, excess process steps, and lost creativity. Identifying and reducing waste is a key principle in lean manufacturing and process improvement.
QUESTION 8: When planning to study a process or system, it is important to first identify the boundaries. Boundaries define the scope and limits of the process or system being studied. By clearly defining the boundaries, it becomes easier to focus on the specific areas of interest and understand how inputs, processes, and outputs are interconnected. This helps in conducting a more effective analysis and improvement efforts.
QUESTION 9: Gathering customer data is essential for understanding customer needs, preferences, and expectations. The tools for gathering customer data include:
Voice of the customer: This involves directly listening to and understanding the feedback, opinions, and requirements of customers through various channels such as surveys, interviews, and focus groups.
Surveys: Surveys are structured questionnaires designed to collect specific information from a large number of respondents. They can be conducted through various methods like online surveys, phone surveys, or mailed questionnaires.
Quality Function Deployment (QFD): QFD is a systematic process that translates customer requirements into specific design and production requirements. It helps capture and prioritize customer needs.
Interviews: Interviews involve one-on-one discussions with customers to gather in-depth insights and explore their perspectives and experiences.
Focus groups: Focus groups bring together a small group of customers to have a facilitated discussion on specific topics. It allows for group interactions and deeper exploration of customer opinions.
These tools help organizations gather valuable customer insights and use them to improve products, services, and overall customer satisfaction.
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Economics in the News May 17,2020 First, study the news article linked below. Malls need major rethink to survive pandemic, retail consultants say. A. at any point above the PPF B. at any point on the PPF or inside the PPF C. at any point on the PPF or above the PPF D. any combination anywhere on the graph if its sales are great enough 3. When is the firm producing at a point of allocative efficiency? The firm is producing at a point of allocative efficiency when it produces at A. the point on the PPF at which marginal benefit equals marginal cost B. the point on the PPF that minimizes marginal cost C. the point on the PPF that maximizes marginal benefit D. any point on the PPF 4. Where on the graph does the firm face a tradeoff? The firm faces a tradeoff A. only when it makes all sales in its brick-and-mortar store B. when it produces at any point on the PPF C. when it produces at any point inside the PPF D. only when it makes all sales online
The firm faces a tradeoff when it produces at any point on the PPF. It is because the law of increasing opportunity cost states that as the production of one commodity increases, the production of the other decreases.
1. According to the article linked, how have malls been impacted by the pandemic?Malls have been impacted by the pandemic because, according to retail consultants, they require major rethinking to survive.
2. According to the law of increasing opportunity cost, the firm can produce a combination of goods most efficiently at any point on the PPF or above the PPF. It is because the production on or above the PPF represents production efficiency. The answer is: C. at any point on the PPF or above the PPF
3. The firm is producing at a point of allocative efficiency when it produces at the point on the PPF at which marginal benefit equals marginal cost. It implies that the resources are being distributed optimally, and the goods and services that are most demanded are being produced by the firm. Therefore, the answer is: A. the point on the PPF at which marginal benefit equals marginal cost.
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Rite Bite Enterprises sells toothpicks. Gross revenues last year were $10.3 million, and total costs were $5.2 million. Rite Bite has 1.6 million shares of common stock outstanding. Gross revenues and costs are expected to grow at 4 percent per year. Rite Bite pays no income taxes. All earnings are paid out as dividends. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) a. If the appropriate discount rate is 17 percent and all cash flows are received at year's end, what is the price per share of Rite Bite stock? Price per share $ b. Rite Bite has decided to produce toothbrushes. The project requires an immediate outlay of $18.8 million. In one year, another outlay of $7.8 million will be needed. The year after that, earnings will increase by $6.0 million. That profit level will be maintained in perpetuity. What will the new stock price be if the project is undertaken? Price per share
a. The price per share of Rite Bite stock is $25.20. This is calculated using the discounted cash flow (DCF) approach, taking into account the company's gross revenues, total costs, number of shares, growth rate, and discount rate.
b. The new stock price if the toothbrush project is undertaken is $17.48 million. This is determined by calculating the present value of the project's cash flows and adding it to the current stock price. The cash flows include the initial outlay, additional outlay, and increased earnings, while the discount rate is used to discount these cash flows to their present value.
a. The price per share of Rite Bite stock can be calculated using the discounted cash flow (DCF) approach. The DCF formula is:
Price per share = (Dividends per share / (Discount rate - Growth rate))
To find the dividends per share, we need to calculate the net income first:
Net income = Gross revenues - Total costs = $10.3 million - $5.2 million = $5.1 million
Dividends per share = Net income / Number of shares = $5.1 million / 1.6 million = $3.19
Using the given values, the growth rate is 4% and the discount rate is 17%. Plugging these values into the DCF formula:
Price per share = ($3.19 / (0.17 - 0.04)) = $25.20
Therefore, the price per share of Rite Bite stock is $25.20.
b. To calculate the new stock price if the toothbrush project is undertaken, we need to calculate the present value of the future cash flows from the project and add it to the current stock price.
The present value of the future cash flows can be calculated as follows:
PV = (Cash flow in Year 1 / (1 + Discount rate)) + (Cash flow in Year 2 / (1 + Discount rate)^2) + (Cash flow in Year 3 / (Discount rate - Growth rate))
Cash flow in Year 1 = -$18.8 million (initial outlay)
Cash flow in Year 2 = -$7.8 million (additional outlay)
Cash flow in Year 3 = $6.0 million (increase in earnings)
Using the given discount rate of 17% and growth rate of 4%:
PV = (-$18.8 million / (1 + 0.17)) + (-$7.8 million / (1 + 0.17)^2) + ($6.0 million / (0.17 - 0.04))
PV = -$15.98 million + (-$6.54 million) + $40.00 million
PV = $17.48 million
Now, we add the present value of the cash flows to the current stock price:
New stock price = Current stock price + PV
New stock price = $25.20 + $17.48 million
New stock price = $17.48 million (rounded to 2 decimal places)
Therefore, the new stock price if the toothbrush project is undertaken would be $17.48 million.
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Emperor Co. has issued 10,000 samurai bond with a 5.5% annual coupon rate, 25 years to maturity, a $1,000 face value, and a $1,250 market price. The management has also decided to issue stocks in their capital structure decision, whereby: 150,000 shares of preferred stock with $2.5 annual dividend. The preferred stock's price is $33/share. 555,000 shares of ordinary stock with price of $28 per share. The beta for emperor stock is 1.3. Assuming the Treasury bill-rate of 2.75%, and the S&P500 market return is 9.75%, while the tax rate is 25%. Calculate the following variables: a. Find the market capitalization of samurai bond. b. Find the cost of debt for samurai bond.c. Find the market capitalization of preferred stock d. Find the cost of preferred stock! (1 mark) e. Find the market capitalization of ordinary stock f. Find the cost of ordinary stock (1 mark) g. Find total value of the firm h. Find the weighted (proportion) of bond, preferred-stock, and ordinary stock (2 marks) i. What is the Emperor's WACC?
a. Market capitalization of samurai bond = Number of bonds x face value of bond x market price of bondMarket capitalization of samurai bond = 10,000 x $1,000 x $1,250Market capitalization of samurai bond = $12,500,000b. Cost of debt for b bondThe formula to calculate the cost of debt isCost of debt = (Coupon rate x face value) / Market price of bondCost of debt = (5.5% x $1,000) / $1,250Cost of debt = 0.044 or 4.4%c.
Market capitalization of preferred stockMarket capitalization of preferred stock = Number of shares x price per shareMarket capitalization of preferred stock = 150,000 x $33Market capitalization of preferred stock = $4,950,000d. Cost of preferred stockThe formula to calculate the cost of preferred stock isCost of preferred stock = Dividend per share / Price per shareCost of preferred stock = $2.5 / $33Cost of preferred stock = 0.0758 or 7.58%e. Market capitalization of ordinary stockMarket capitalization of ordinary stock = Number of shares x price per shareMarket capitalization of ordinary stock = 555,000 x $28Market capitalization of ordinary stock = $15,540,000f. Cost of ordinary stockThe formula to calculate the cost of ordinary stock isCost of ordinary stock = RFR + Beta x (Market rate of return - RFR)Cost of ordinary stock = 2.75% + 1.3 x (9.75% - 2.75%)Cost of ordinary stock = 11.02%g. Total value of the firmTotal value of the firm = Market capitalization of samurai bond + Market capitalization of preferred stock + Market capitalization of ordinary stockTotal value of the firm = $12,500,000 + $4,950,000 + $15,540,000Total value of the firm = $33,990,000h. Weighted proportion of bond, preferred-stock, and ordinary stockWeighted proportion of bond = Market capitalization of bond / Total value of the firmWeighted proportion of bond = $12,500,000 / $33,990,000Weighted proportion of bond = 0.368 or 36.8%Weighted proportion of preferred stock = Market capitalization of preferred stock / Total value of the firmWeighted proportion of preferred stock = $4,950,000 / $33,990,000Weighted proportion of preferred stock = 0.145 or 14.5%Weighted proportion of ordinary stock = Market capitalization of ordinary stock / Total value of the firmWeighted proportion of ordinary stock = $15,540,000 / $33,990,000Weighted proportion of ordinary stock = 0.456 or 45.6%i. Emperor's WACCWACC = (Weight of debt x Cost of debt x (1 - Tax rate)) + (Weight of preferred stock x Cost of preferred stock) + (Weight of ordinary stock x Cost of ordinary stock)WACC = (0.368 x 0.044 x (1 - 0.25)) + (0.145 x 0.0758) + (0.456 x 0.1102)WACC = 0.051 or 5.1%Therefore, the Emperor's WACC is 5.1%.
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The risk-free rate is 2.7% and the market risk premium is 6.74%. A stock with a β of 1.68 just paid a dividend of $2.1. The dividend is expected to grow at 20.37% for five years and then grow at 3.25% forever. What is the value of the stock? Currency: Round to: 2 decimal place
The risk-free rate is 2.7% and the market risk premium is 6.74%. A stock with a β of 1.68 just paid a dividend of $2.1. The dividend is expected to grow at 20.37% for five years and then grow at 3.25% forever. The value of the stock is approximately $35.07.
To calculate the value of the stock, we can use the dividend discount model (DDM), which takes into account the present value of the expected future dividends. The formula for the DDM is:
Value of stock = (Dividend / (1 + Cost of Equity - Dividend Growth Rate)) + (Dividend * (1 + Dividend Growth Rate) / (Cost of Equity - Dividend Growth Rate))
Given information:
Dividend (D0) = $2.1
Dividend growth rate (g1) = 20.37%
Dividend growth rate (g2) = 3.25%
Beta (β) = 1.68
Risk-free rate = 2.7%
Market risk premium = 6.74%
First, we need to calculate the cost of equity using the Capital Asset Pricing Model (CAPM):
Cost of Equity = Risk-free rate + (Beta * Market risk premium)
= 2.7% + (1.68 * 6.74%)
= 14.66%
Next, we can calculate the present value of the dividends for the first five years:
PV(D1) = D0 * (1 + g1) / (1 + Cost of Equity)
= $2.1 * (1 + 20.37%) / (1 + 14.66%)
= $2.1 * 1.2037 / 1.1466
= $2.2046
PV(D2) = D1 * (1 + g1) / (1 + Cost of Equity)
= $2.2046 * (1 + 20.37%) / (1 + 14.66%)
= $2.2046 * 1.2037 / 1.1466
= $2.3077
PV(D3) = D2 * (1 + g1) / (1 + Cost of Equity)
= $2.3077 * (1 + 20.37%) / (1 + 14.66%)
= $2.3077 * 1.2037 / 1.1466
= $2.4113
PV(D4) = D3 * (1 + g1) / (1 + Cost of Equity)
= $2.4113 * (1 + 20.37%) / (1 + 14.66%)
= $2.4113 * 1.2037 / 1.1466
= $2.5176
PV(D5) = D4 * (1 + g1) / (1 + Cost of Equity)
= $2.5176 * (1 + 20.37%) / (1 + 14.66%)
= $2.5176 * 1.2037 / 1.1466
= $2.6261
Next, we calculate the present value of the perpetual dividend using the perpetuity formula:
PV (Perpetual Dividend) = D5 / (Cost of Equity - g2)
= $2.6261 / (14.66% - 3.25%)
= $2.6261 / 11.41%
= $23.00
Finally, we can calculate the value of the stock:
Value of stock = PV(D1) + PV(D2) + PV(D3) + PV(D4) + PV(D5) + PV (Perpetual Dividend)
= $2.2046 + $2.3077 + $2.4113 + $2.5176 + $2.6261 + $23.00
= $35.07
Therefore, the value of the stock is approximately $35.07.
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As companies struggle to increase customer value by improving performance, many companies are turning their attention to purchasing and supply management. Furthermore, many features of products will make their way into final products originate with suppliers. Supplier capabilities will help differentiate a producer’s final good or service, increasing their value to the final customer.
Evaluate Five (5) suppliers’ performance and criteria before deciding the purchasing final approval at managerial level. Briefly explain how the actions are taken. Support your answer with relevant industry examples.
When evaluating suppliers' performance and criteria before deciding on final approval at the managerial level, there are several actions that can be taken:
Quality Assessment: Evaluate the suppliers' track record in delivering high-quality products or services. This can involve analyzing their quality control processes, certifications, and customer feedback. For example, an automobile manufacturer may assess suppliers based on their ability to meet strict quality standards for components such as engines or safety systems.
Cost Analysis: Assess the suppliers' pricing structure and overall cost competitiveness. This involves comparing prices, negotiating contracts, and conducting cost-benefit analyses. For instance, a retail company may evaluate suppliers based on their ability to provide competitive pricing for merchandise while maintaining quality.
Delivery Reliability: Evaluate the suppliers' track record in meeting delivery deadlines and maintaining consistent supply. This can involve analyzing delivery performance metrics, on-time delivery rates, and inventory management capabilities. An example would be a food manufacturing company assessing suppliers based on their ability to provide timely delivery of ingredients to meet production demands.
Innovation and Technological Capability: Assess the suppliers' ability to bring innovation and new technologies to the table. This involves evaluating their research and development capabilities, patents, and track record of introducing new products or processes. A technology company may prioritize suppliers who can provide cutting-edge components or materials.
Risk Management: Evaluate the suppliers' risk management strategies and their ability to handle disruptions or unforeseen circumstances. This can involve analyzing their contingency plans, business continuity practices, and financial stability. For example, an airline may assess suppliers based on their ability to manage supply chain disruptions during times of natural disasters or global events.
Industry examples may include an electronics manufacturer evaluating suppliers based on their ability to provide high-quality components, a pharmaceutical company assessing suppliers based on their regulatory compliance and adherence to strict quality standards, or a hospitality chain evaluating suppliers based on their ability to provide sustainable and eco-friendly products.
By considering these factors, companies can make informed decisions about which suppliers to choose, ensuring that they meet the required criteria and contribute to increasing customer value through improved performance and differentiation in the final product or service.
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There are two stocks in the market, stock A and stock B. The price of stock A today is $70. The price of stock A next year will be $60 if the economy is in a recession, $82 if the economy is normal, and $86 if the economy is expanding. The probabilities of recession, normal times, and expansion are 0.2,0.6, and 0.2, respectively. Stock A pays no dividends and has a correlation of 0.9 with the market portfolio. Stock B has an expected return of 10 percent, a standard deviation of 52 percent, a correlation with the market portfolio of 0.3, and a correlation with stock A of 0.25. The market portfolio has a standard deviation of 14 percent. Assume the two stocks are not necessarily correctly priced (i.e., the CAPM may not hold for each of the two stocks). a) What are the expected return, standard deviation, variance, and beta of stock A? (15 marks) b) What is the beta of stock B? (4 marks) c) If you are a typical, risk-averse investor with a welldiversified portfolio, which stock would you prefer? Why? (5 marks) d) What are the expected return and standard deviation of a portfolio consisting of 70 percent of stock A and 30 percent of stock B? (9 marks) e) What is the beta of the portfolio in part (d)? (4 marks)
To calculate the expected return, standard deviation, variance, and beta of stock A, we will use the given information.Expected Return:
The expected return of stock A can be calculated by taking the weighted average of the possible returns in each economic state:Expected Return = (Return in Recession * Probability of Recession) + (Return in Normal Times * Probability of Normal Times) + (Return in Expansion * Probability of Expansion)Expected Return = (60 * 0.2) + (82 * 0.6) + (86 * 0.2)Standard Deviation:The standard deviation of stock A can be calculated using the formula:Standard Deviation = sqrt((Return in Recession - Expected Return)^2 * Probability of Recession + (Return in Normal Times - Expected Return)^2 * Probability of Normal Times + (Return in Expansion - Expected Return)^2 * Probability of Expansion)Variance:The variance of stock A can be calculated by squaring the standard deviation:Variance = Standard Deviation^2Beta:The beta of stock A can be calculated using the formula:Beta = Covariance(A, Market) / Variance(Market)Given that stock A has a correlation of 0.9 with the market portfolio, we can use the formula:Beta = Correlation(A, Market) * (Standard Deviation(A) / Standard Deviation(Market)) To calculate the beta of stock B, we can use the given correlation with the market portfolio and the formula:Beta = Correlation(B, Market) * (Standard Deviation(B) / Standard Deviation(Market))To determine which stock a typical, risk-averse investor with a well-diversified portfolio would prefer, we need to consider the expected returns and risks of both stocks. Investors generally prefer higher expected returns with lower risk. Therefore, the stock that offers a higher expected return with lower volatility would be preferred.
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What are the objectives and strategies for a consulting firm
business? What is the business mission for the consulting firm
?
Objectives and Strategies for a Consulting Firm Business:
The objectives of a consulting firm business are to provide valuable expertise and solutions to clients, build long-term relationships, deliver high-quality services, and achieve sustainable growth. Consulting firms employ various strategies: Client Satisfaction, Expertise Development, Business Development, Operational Efficiency, Team Collaboration.
Business Mission for the Consulting Firm:
The business mission of a consulting firm typically revolves around providing valuable and strategic advisory services to clients, helping them overcome challenges, and achieving their organizational goals. The mission statement may emphasize the following: Client Success, Expertise and Excellence, Partnerships and Relationships, Social Impact.
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Suppose f(x,y)=(xy) 2
and g(x,y)=(x 2
y) 3
(a) What is the degree of homogeneity for f(x,y) (b) What is the degree of homogeneity for g(x,y) (c) What is the degree of homogeneity for h(x,y)=f(x,y)∗g(x,y)
The degree of homogeneity for f(x, y) is 2, for g(x, y) is 5 and for h(x, y) is 13.
The degree of homogeneity helps to understand how a function changes when the variables are scaled.
(a) For f(x, y) = (xy)², the exponents of x and y are both 2. Therefore, the degree of homogeneity for f(x, y) is 2.
(b) For g(x, y) = (x²y)³, the exponent of x is 2, and the exponent of y is 3. Therefore, the degree of homogeneity for g(x, y) is 2 + 3 = 5.
(c) For h(x, y) = f(x, y) × g(x, y), we need to multiply the functions f(x, y) and g(x, y).
h(x, y) = (xy)² × (x²y)³
= (x²y²) × (x⁶y³)
= x⁸y⁵
The degree of homogeneity for h(x, y) is 8 + 5 = 13.
Therefore, The degree of homogeneity in a, b, and c is 2, 5, and 13 respectively.
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The function h(x, y) = f(x, y) * g(x, y) is homogeneous of degree 10 since it is the product of functions with degrees 4 and 6.
To determine the degree of homogeneity for each function, we need to examine how the scale of the function when the input variables are multiplied by a constant factor. Let's analyze each function step by step:
(a) Function f(x, y) = (xy)^2:
To determine the degree of homogeneity, we need to check how the function behaves under scaling. Let's consider a scaling factor λ > 0.
Substitute λx and λy into the function:
f(λx, λy) = (λxλy)^2 = (λ^2xy)^2 = λ^4(x^2y^2).
Compare the result to the original function:
f(λx, λy) = λ^4f(x, y).
From the comparison above, we can see that the function f(x, y) = (xy)^2 is homogeneous of degree 4 since it scales by λ^4.
(b) Function g(x, y) = (x^2y)^3:
Similarly, we will investigate how the function g(x, y) behaves under scaling using a scaling factor λ > 0.
Substitute λx and λy into the function:
g(λx, λy) = ((λx)^2(λy))^3
= (λ^2x^2λy)^3
= λ^6(x^2y)^3.
Compare the result to the original function:
g(λx, λy) = λ^6g(x, y).
From the comparison above, we can deduce that the function
g(x, y) = (x^2y)^3 is homogeneous of degree 6 as it scales by λ^6.
(c) Function h(x, y) = f(x, y) * g(x, y):
To determine the degree of homogeneity for the product of two functions, we can multiply their respective degrees of homogeneity.
Degree of h(x, y) = Degree of f(x, y) + Degree of g(x, y)
Degree of h(x, y) = 4 + 6
Degree of h(x, y) = 10.
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Three of the companies are upscole stores and one is a discount store. Which compony ts mast ilvoly to ne the discount store? Mumple Choice Company D Company B Company C Company A
Based on the information provided, it is not possible to determine which company is most likely to be the discount store among Company A, Company B, Company C, and Company D. Additional information or context is needed to make a more informed decision.
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Find the MRS(marginal rate of substitution) for the Utility
functions:
U(x,y) = x+xy+y^2
Hence, the main answer is: MRS = (1 + y)/(x + 2y). The given utility function is; U(x, y) = x + xy + y²
To obtain the marginal rate of substitution, we need to consider the marginal utility of x (MUx) and the marginal utility of y (MUy). The formula for marginal rate of substitution (MRS) is given by:
MRS = MUx / MUy
To get MUx, we differentiate the function with respect to x, and for MUy, we differentiate with respect to y.
MUx = ∂U/∂x
= 1 + y
MUy = ∂U/∂y
= x + 2y
Now, we can substitute these results in the formula for MRS:
MRS = MUx/MUy
= (1 + y)/(x + 2y)
Therefore, the marginal rate of substitution is (1 + y)/(x + 2y). To find this answer, we used the marginal utility of x (MUx) and the marginal utility of y (MUy).
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On January 1, Year 1, you are considering the purchase of $10,000 of Colin Company's 8% bonds. The bonds are due in 10 years, with interest payable semiannually on June 30 and effective December 31. Based on your analysis of Colin, you determine that a 6% (required) interest rate is appropriate. Required: a. Compute the price you will pay for the bonds using the present value model (round the answer to the nearest dollar). EXERCISE 1-14 Valuation of Bonds (semiannual interest)
To compute the price you will pay for the bonds using the present value model, we need to calculate the present value of the bond's future cash flows, which include both the periodic interest payments and the principal repayment at maturity. you will pay approximately $9,567 for the bonds using the present value model.
The present value of the bond's future cash flows can be calculated using the following formula: PV = C × [1 - (1 + r)^(-n)] / r + (M / (1 + r)^n)
Where: PV = Present value of the bond, C = Coupon payment (interest payment per period), r = Discount rate (required interest rate per period), n = Total number of periods, M = Maturity value (principal repayment), Given: Coupon payment (C) = 8% of $10,000 = $800 (per year, semiannually $400), Discount rate (r) = 6% (per year, semiannually 3%), Total number of periods (n) = 10 years (semiannually 20 periods),
Maturity value (M) = $10,000
Using the formula, we can calculate the present value:
PV = $400 × [1 - (1 + 0.03)^(-20)] / 0.03 + ($10,000 / (1 + 0.03)^20)
PV ≈ $9,567 (rounded to the nearest dollar). Therefore, you will pay approximately $9,567 for the bonds using the present value model.
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This week you were assigned to read the The Wall Street Journal article "The Garden Gloves Come Off." Discuss the article and how the oligopoly models presented in Chapter 13 of the textbook apply to the behavior of Home Depot and Lowe's. Make sure to make a connection between the actual behaviour of these two companies and the characteristics of companies in an oligopoly market structure.
In conclusion, Home Depot and Lowe's are perfect examples of oligopoly market firms. Their behavior is a result of the industry's market structure, characterized by interdependence, non-price competition, significant barriers to entry, and differentiated products.
The Wall Street Journal article "The Garden Gloves Come Off" sheds light on the rivalry between two oligopoly market companies, Lowe's and Home Depot. The article also emphasizes the strategies used by both companies to stay ahead of the competition.In the oligopoly market structure, the behavior of the firms is determined by the behavior of the other firms. This is because the number of firms is limited, and each firm has a significant impact on the industry's market share. Companies in this market structure have interdependence, where their actions impact other firms in the same market. Oligopoly firms are known to engage in non-price competition, where they compete by developing unique products, services, and marketing strategies, rather than reducing prices.In relation to the characteristics of companies in an oligopoly market structure, the behavior of Home Depot and Lowe's in The Wall Street Journal article is quite apparent. Both companies have the power to influence the prices of goods in the industry.
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How are BlueCross and BlueShield programs pioneers in insurance? Discuss their joint ventures. What sets BCBS apart from other commercial health insurance groups?
Blue Cross and Blue Shield programs offer a range of health insurance programs and have been involved in a number of joint ventures
They offer a range of health insurance programs and have been involved in a number of joint ventures. One of the joint ventures between Blue Cross and Blue Shield was the creation of BlueCard, which allows members to get healthcare services while traveling across the United States.
What sets Blue Cross and Blue Shield apart from other commercial health insurance groups is that it is a not-for-profit organization ?The company has a long-standing commitment to improving healthcare access and quality for its members. The company is known for its Blue Cross and Blue Shield Association, which provides a range of healthcare products and services to its members. The company also has a strong reputation for its customer service and support.Overall, Blue Cross and Blue Shield is a pioneer in the insurance industry, offering a range of healthcare programs that meet the diverse needs of its members.
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Performance impacts pay can be defined as the overarching goal of the compensation strategy. This is to ensure an organization has allocated the necessary compensation package to motivate the performance needed to achieve the business strategy, as such, compensation should also tie into the overall performance management strategy. Explain THREE (3) approaches to performance appraisal and propose acceptable industry standard of the percentage between KPIs and Competency Behaviours in the performance appraisal process.
Three approaches to performance appraisal are: Trait-based approach: This approach assesses an employee's personal traits and characteristics, such as communication skills, teamwork, and problem-solving abilities.
It focuses on evaluating the individual's inherent qualities rather than their specific job performance. Behavior-based approach: This approach assesses an employee's observable behaviors and actions in the workplace. It examines how well the employee demonstrates desired behaviors and competencies, such as customer service, leadership, and adherence to company policies and values.
Results-based approach: This approach evaluates an employee's actual job performance and the outcomes they achieve. It focuses on measuring the employee's ability to meet or exceed performance targets, accomplish goals, and contribute to the overall success of the organization.
In terms of the percentage between Key Performance Indicators (KPIs) and Competency Behaviors in the performance appraisal process, there is no universally accepted industry standard. The ratio may vary depending on the nature of the job, industry, and organizational priorities. However, a commonly suggested guideline is to allocate approximately 70% weight to KPIs and 30% weight to Competency Behaviors. This ensures a balance between achieving results and exhibiting desired behaviors that align with the organization's values and culture. Ultimately, the specific percentage allocation should be tailored to the unique needs and objectives of the organization.
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"
If Susie earns $750,000 in taxable income and files as head of
household for year 2022, what is Susie's average tax rate? (Use tax
rate schedule.) (Round your final answer to two decimal
places.)
32.0
"
Susie's average tax rate for the year 2021 is approximately 32.76%.
To determine Susie's average tax rate, we need to refer to the tax rate schedule for the year 2021. The tax rate schedule consists of different income brackets, each with its corresponding tax rate. We'll calculate the tax amount for each bracket and then find the average tax rate.
Here's the breakdown of the tax rate schedule for 2021:
The first $9,950 of taxable income is taxed at 10%
The income between $9,951 and $40,525 is taxed at 12%
The income between $40,526 and $86,375 is taxed at 22%
The income between $86,376 and $164,925 is taxed at 24%
The income between $164,926 and $209,425 is taxed at 32%
The income between $209,426 and $523,600 is taxed at 35%
Any income above $523,600 is taxed at 37%
Now, let's calculate the tax amount for each bracket:
Tax on the first $9,950:
$9,950 * 0.10 = $995
Tax on the next $30,575 ($40,525 - $9,950):
$30,575 * 0.12 = $3,669
Tax on the next $45,850 ($86,375 - $40,525):
$45,850 * 0.22 = $10,087
Tax on the next $78,550 ($164,925 - $86,375):
$78,550 * 0.24 = $18,852
Tax on the next $54,500 ($209,425 - $164,925):
$54,500 * 0.32 = $17,440
Tax on the next $316,175 ($523,600 - $209,425):
$316,175 * 0.35 = $110,652.50
Tax on the remaining income: ($750,000 - $523,600) * 0.37 = $84,020
Now, add up all the tax amounts:
$995 + $3,669 + $10,087 + $18,852 + $17,440 + $110,652.50 + $84,020 = $245,715.50
Finally, calculate the average tax rate:
$245,715.50 / $750,000 ≈ 0.32762 or 32.76%.
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If Susie earns $750,000 in taxable income and files as head of household for year 2021, what is Susie's average tax rate? (Use tax rate schedule.) (Round your final answer to two decimal places.)
Annual credit sales of Nadak Co. total $359.5 million. The firm gives a 1.75% cash discount for payment within 10 days of the invoice date; 80% of Nadak's accounts receivable are paid within the discount period. Required: a. What is the total amount of cash discounts allowed in a year? (Enter your answer in millions rounded to 2 decimal places.) Answer is complete and correct. b. Calculate the approximate annual rate of return on investment that Nadak Co.'s cash discount terms represent to customers who take the discount. (Assume a credit period of 30 days and 360-days year). (Round intermediate calculations to 2 decimal places. Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) × Answer is complete but not entirely correct.
Given information:
Annual credit sales = $359.5 million
Cash discount rate = 1.75%
Percentage of accounts receivable paid within the discount period = 80%
First, calculate the total amount of credit sales that are eligible for the cash discount:
Total eligible credit sales = Annual credit sales × Percentage of accounts receivable paid within the discount period
Total eligible credit sales = $359.5 million × 80% = $287.6 million
Next, calculate the amount of cash discounts allowed:
Cash discounts allowed = Total eligible credit sales × Cash discount rate
Cash discounts allowed = $287.6 million × 1.75% = $5.04 million
Given information:
Cash discount rate = 1.75%
Credit period = 30 days
Year = 360 days
Substituting the values into the formula:
ROI = (1.75% / (1 - 1.75%)) × (360 / 30)
ROI = (0.0175 / (1 - 0.0175)) × 12
Calculating the expression within parentheses:
(1 - 0.0175) ≈ 0.9825
Substituting back into the formula:
ROI ≈ (0.0175 / 0.9825) × 12
ROI ≈ 0.01782 × 12
ROI ≈ 0.2139
Converting to a percentage:
ROI ≈ 21.4%
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b)
how does your anseer change if the holding cost doubles?
the EOQ is _____ units
If \( D=8,100 \) per month, \( S=\$ 48 \) per order, and \( H=\$ 2.00 \) per unit per month, a) What is the economic order quantity? The EOQ is units (round your response to the nearest whole number).
The question relates to the impact of doubling the holding cost on the economic order quantity (EOQ) calculation. The EOQ, considering the doubled holding cost, is approximately 441 units.
If the holding cost doubles, it means the value of H increases from $2.00 per unit per month to $4.00 per unit per month. To calculate the economic order quantity (EOQ), the formula is used:
EOQ = [tex]\sqrt{[(2DS) / H]}[/tex].
Given the values of D = 8,100 per month, S = $48 per order, and the new value of H = $4.00 per unit per month, we can plug them into the formula to find the EOQ.
EOQ =$[tex]\sqrt{[(2*8100*48) / 4.00]}[/tex]
Calculating the expression within the square root, we get:
EOQ = [tex]\sqrt{[(778800) / 4.00]}[/tex] = 441.
Therefore, the revised EOQ, considering the doubled holding cost, is approximately 441 units.
By doubling the holding cost, the EOQ decreases because a higher holding cost encourages smaller order quantities to minimize inventory holding costs.
This reduction in the EOQ suggests that it is more cost-effective to order smaller quantities more frequently to avoid excessive inventory costs associated with the increased holding cost.
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Filer Manufacturing has 9,602,018 shares of common stock outstanding. The current share price is $38.16, and the book value per share is $9.34. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $54,975,828, has a 0.07 coupon, matures in 23 years and sells for 88 percent of par. The second issue has a face value of $62,699,160, has a 0.05 coupon, matures in 26 years, and sells for 82 percent of par. What is Filer's weight of equity on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
Filer Manufacturing's weight of equity on a market value basis is approximately 0.3015, or 30.15%.
To calculate the weight of equity on a market value basis, we need to determine the market value of the equity and the total market value of the firm. The market value of the equity is calculated by multiplying the number of shares outstanding by the current share price: Market value of equity = Number of shares outstanding * Share price. Market value of equity = 9,602,018 * $38.16
Next, we need to calculate the market value of the firm, which includes both the equity and the bond issues. The market value of the first bond issue can be calculated as the product of its face value, coupon, and the selling price percentage of par: Market value of first bond issue = $54,975,828 * 0.07 * 0.88. Similarly, the market value of the second bond issue can be calculated as: Market value of second bond issue = $62,699,160 * 0.05 * 0.82
Finally, we can calculate the total market value of the firm by summing the market value of equity and the market value of the bond issues: Total market value of the firm = Market value of equity + Market value of first bond issue + Market value of second bond issue. To find the weight of equity on a market value basis, we divide the market value of equity by the total market value of the firm:
The weight of equity on a market value basis for Filer Manufacturing is calculated by dividing the market value of equity by the total market value of the firm. The market value of equity is obtained by multiplying the number of shares outstanding (9,602,018) by the current share price ($38.16). The total market value of the firm is calculated by summing the market value of equity and the market values of the bond issues. By performing the calculations, the weight of equity on a market value basis for Filer Manufacturing is approximately 0.3015, or 30.15%.
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If one company could gain ownership control of all of the wind power plants in the US, then the factors of market demand and supply will set the price. government will deregulate to ensure the company's monopoly. that firm could set up barriers to entry to discourage competition. O they will strive to reach efficiencies only they know how to make.
If one company were to gain ownership control of all wind power plants in the US, it would indeed have significant market power. In such a scenario, the following factors and outcomes could be observed:
1. Market Demand and Supply: With a monopoly on wind power plants, the company would have the ability to influence the price of wind power. In the absence of competition, the company could potentially set higher prices, taking advantage of the relatively inelastic demand for renewable energy.
2. Deregulation: To ensure the company's monopoly position, the government might choose to deregulate the wind power industry, removing any regulations or barriers that could hinder the company's control over the market. This could further solidify the company's dominance and limit competition.
3. Barriers to Entry: The company could establish barriers to entry to discourage potential competitors from entering the market. These barriers could include high capital requirements, exclusive agreements with suppliers or distributors, or intellectual property rights over proprietary technologies, making it difficult for new entrants to compete effectively.
4. Efficiency: As the sole owner of all wind power plants in the US, the company may have the incentive to achieve operational efficiencies. It could leverage its control over the entire supply chain and production process to optimize operations, reduce costs, and maximize profits.
However, it's important to note that such a scenario of complete ownership control by a single company over an entire industry is generally unlikely to occur in practice due to antitrust regulations and government oversight. Monopolies can have negative implications for competition, innovation, and consumer welfare. Governments often aim to promote competition and prevent the abuse of market power through regulatory measures.
In summary, while a company gaining ownership control of all wind power plants could potentially lead to certain outcomes, the likelihood of such a scenario is low, and governments typically strive to maintain competitive markets to benefit consumers and the overall economy.
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An office that dispenses automotive license plates has divided its customers into categories to level the office workload. Customers arrival can be modelled as 3 independent arrival streams using exponential interarrival distribution with mean 10 minutes each stream.eaxh customer accept payment with separate queue for each. The service time is UNIF (8,10) minutes for all customer types. After completion of this step the clerk serves all 3 customer types who merge into single first come first serve queue for this clerk. Suppose we need to use decide module for branching the parts according to their type before being disposed after the second customer 2:34 PM A. 3 way by chance with 33.33% with first true line connected to customer type 1 Dispose, second true line connected to customer type 2 Dispose B. 3 way by condition based on entity type match where customer 1 is connected from first true line to customer type 1 Dispose C. 3 way by chance with 40% with first true line connected to customer type 1 Dispose second true line connected to customer type 2 Dispose D. 2 way by condition if arrival time is equal to arrival time to the system
The exact details of the condition and disposal processes would need to be defined based on the specific requirements and characteristics of the system being modeled.
Based on the information provided, the appropriate decision module for branching the parts according to their type before being disposed after the second customer at 2:34 PM would be:
B. 3 way by condition based on entity type match where customer 1 is connected from the first true line to customer type 1 Dispose.
In this scenario, the decision module is based on the condition of the entity type match. Each customer type is assigned a specific condition, and the decision is made based on which condition is true for the respective customer.
Here's how the decision module would be implemented:
The first true line will be connected to the condition for customer type 1. If the entity type of the first customer matches customer type 1, this condition will be true.
The second true line will be connected to the condition for customer type 2. If the entity type of the first customer matches customer type 2, this condition will be true.
The third true line will be connected to the condition for customer type 3. If the entity type of the first customer matches customer type 3, this condition will be true.
Based on the condition that is true, the respective customer type will be directed to the corresponding disposal process.
It is important to note that the specific conditions for each customer type and the corresponding disposal processes are not provided in the given information. Therefore, the exact details of the condition and disposal processes would need to be defined based on the specific requirements and characteristics of the system being modeled.
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